FG commits N72bn on procurement of equipment for unused 2,000MWs of electricity

07/10/2018

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Mr Babatunde Fashola, the Minister of Power, Works and Housing said this at a news conference in Abuja on Monday.

The Federal Government has committed to invest N72 billion for the procurement and installation of equipment to help distribute unused 2,000 MegaWatts (MW) of electricity to consumers in the country.

Mr Babatunde Fashola, the Minister of Power, Works and Housing said this at a news conference in Abuja on Monday.

He said the 2,000MWs was from the 7,000MWs that GENCOS could generate and the 5,000 MWs that DisCos could distribute.

According to the minster, the DisCos have complained about inadequate power to distribute.

Fashola, however, said the problem presently was that the DisCos could not distribute all the power that was available.

This, he explained, was leaving the sector with an unused capacity of 2,000 MWs, with an approximately 1,150 MWs projected to come in 2018 and 2019 respectively.

He said government had advertised the process of procuring the equipment and was encouraging responses from original equipment manufacturers, which were being evaluated.

Fashola said government in a bid to help mitigate the challenges of funding in the sector had provided some intervention funds since the privatisation of the sector to the DisCos and GenCos.

The minister noted that government had responded to claims of debts owed by MDAs to DisCos before the coming of the present administration alleged to be in the region of upwards of more than N70 Billion.

“At the cost of government, several hundreds of thousands of bills were painstakingly verified and government ascertained that N27 billion was owed by federal MDAs to DisCos.

“The payment was by a set-off of this amount against the sum of N859 billion owed by DISCOs to Nigerin Bulk Electricity Trading (NBET) to reduce that debt.

“Prior to the tenure of this administration and during it, GENCOS and gas suppliers who produce the power were being underpaid by NBET.

“Because DisCos were under collecting or under remitting such that GenCos were getting only about 20 per cent of their invoices for power they generated.’’

The minister, who expressed worry over the activities of some operators, said government was acting and would not relent to salvage the challenges in the sector.

“The number of complaints coming to government for meters, which the DISCOs should supply, and for estimated billings, and mass disconnections when no everybody is owing cannot continue.

“Government must act, and will do so, the DisCos bought these assets with their eyes opened, and they must compete to deliver or exit.

“Small businesses which need very little power are not getting enough because the DisCos cannot take the power to them.

“The investment of GENCOs is threatened because they cannot utilise the capacity they have installed.’’

Fashola, therefore, urged the Nigerian Electricity Regulatory Commission (NERC) in line with the law to prevail on the DisCos to improve their distribution equipment and capacity to take up the available 2,000MWs.

He said NERC should enforce the contract of DisCos to supply meters and act to ensure urgent speedy supply and installation of meters to eliminate estimated billing and promote efficient industry market structures.

“NERC should license such persons subject to terms and conditions in order to promote competition and private sector participation and avoid a private monopoly of power.’’

He said Section 71(6) of Electric Power Sector Reform Act (EPSRA), dealing with terms and conditions of licenses clearly shows that no exclusivity or monopoly was intended for a license holder such as GenCos or DisCos.

“If we take into consideration that after five years of privatisation, there are still people and businesses that do not have power or enough power.

“Common sense and public interest demands that we must not resist ordinary people, small businesses like shops and markets from seeking alternative sources of energy.

“If the DISCOs are not resisting the generator sellers who are contributing to pollution, what is the logic of resisting small entrepreneurs bringing mini gas plants to supply a market need?.

“I am not unmindful of concerns about loss of market or customers by DISCos but this must be balanced against our national interest.

“My belief is that as their businesses become steady and improve, they will be in a position to use their economies of large volumes of power to buy out or out price these small entrepreneurs.

“For now, our developmental needs cannot wait for businessmen who are not yet ready to serve.

“National interest, public good, the need to support small businesses, provide access to power for ordinary people and increase productivity inform the policy statements that I have made, and I expect NERC to act with dispatch.’’